Sorrell gives solid backing to subscription models

Sir Martin Sorrell at a Q&A session at this year's Society of Editors conference.

Sir Martin Sorrell, the founder and chief executive of the world’s largest media agency WPP, has given a huge vote of confidence in digital paywalls.

Sir Martin told the annual Society of Editors conference in the UK that slowing growth in digital advertising was proof of the need for subscription models.

“I personally believe that paywalls are the way to go,” he said.

“If you have content that has value consumers will pay for it. You have to get your mind around the fact that digital [advertising] is going to be less profitable. If that [economic reality] is what you are moving into you’ve got to make cost adjustments. [And] be much more free thinking and flexible about how to make revenue.”

Sir Martin said a number of factors were leading to clients re-evaluating the efficacy of their digital advertising spend, and that would make it challenging for publishers who relied solely on income from digital ads.

He also echoed comments made at last month’s Future Forum about the power of newspaper brands.

“Data in Canada, Australia, the UK, the US and elsewhere shows it is not just a question about time spent, it is also about engagement,” he said.

“Data from many sources shows that when people engage with newspapers in a traditional form, digital too, the quality of the time they spend is much higher than we first thought.”

On ad-blockers, Sir Martin said the biggest thing that would counter ad-blocking is if Google disabled it on YouTube. However he did point to the fact 90 per cent of activity on smartphones used apps which were not subjected to ad-blockers.

“Do I worry about it? Yes. The same way I worried about [ad-skipping on] personal video recorders. We found a way of dealing with that. Do I think it is affecting things now? No I don’t, not materially.”